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Costing MCQ Questions and Solutions with Explanations | Commerce

Costing MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Costing MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-10 section-3

Each section contains 100 MCQs on Costing .
91
If direct service labour is $7000, idle time wages are $2000 and overtime premium is $950, then total figure would be
Discuss
Answer & Solution
Answer: Option C
Solution:
Total Overhead = Direct service labour + Idle time wages + Overtime premium
= $7000 + $2000 + $950 = $9,950
92
Terms used in manufacturing cost systems are
Discuss
Answer & Solution
Answer: Option D
Solution:
Terms used in manufacturing cost systems are prime costs and conversion costs. Manufacturing cost is the sum of costs of all resources consumed in the process of making a product.
93
Direct service labour is $5000, idle time wages are $1000 and overtime premium is $450, then total figure would be
Discuss
Answer & Solution
Answer: Option B
Solution:
Total Overhead = Direct service labour + Idle time wages + Overtime premium
= $5000 + $1000 + $450 = $6,450
94
In an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are
Discuss
Answer & Solution
Answer: Option A
Solution:
In an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are inventoriable costs. Inventoriable costs are included in the cost of a product. For a manufacturer, these costs include direct materials, direct labor, freight in, and manufacturing overhead.
95
Calculation of product cost, gathering information for planning and analyzing information for decisions making are features of
Discuss
Answer & Solution
Answer: Option B
Solution:
Calculation of product cost, gathering information for planning and analyzing information for decisions making are features of cost accounting. Cost accounting is an accounting method that aims to capture a company's costs of production by assessing the input costs of each step of production as well as fixed costs, such as depreciation of capital equipment.
96
Prime cost is $50000 and direct manufacturing labour is $10000, then direct material cost will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Direct material cost = Prime cost - Direct manufacturing labour
= $50000 - $10000 = $40,000
97
An inventory, which consists of partially worked goods or work in progress is called
Discuss
Answer & Solution
Answer: Option B
Solution:
An inventory, which consists of partially worked goods or work in progress is called work in process inventory. Work-in-process is an asset, and so is aggregated into the inventory line item on the balance sheet (usually being the smallest of the three main inventory accounts, of which the others are raw materials and finished goods).
98
Balance sheet, in which all costs of product that must be considered as its assets, is said to be
Discuss
Answer & Solution
Answer: Option C
Solution:
Balance sheet, in which all costs of product that must be considered as its assets, is said to be Inventoriable costs. Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products for revenue generation.
99
Direct material cost is $75000 and direct manufacturing labour is $20000, then prime cost would be
Discuss
Answer & Solution
Answer: Option C
Solution:
Prime cost = Direct material cost + Direct manufacturing labour
= $75000 + $20000 = $95,000
100
Period cost, which consists income statement of manufacturing companies belongs to
Discuss
Answer & Solution
Answer: Option C
Solution:
Period cost, which consists income statement of manufacturing companies belongs to non-manufacturing costs. Non-manufacturing costs refer to those incurred outside the factory or production department. These are costs are not needed in transforming materials into finished goods.